Cryptocurrency regulation has been a controversial topic over the years. it is, by default, impossible to regulate cryptocurrencies directly. Even so, the Financial Services Regulatory Authority of Abu Dhabi wants to make a meaningful impact. For now, they consider and review risk-appropriate regulatory solutions for virtual currencies. This will affect all trading platforms and other intermediary services.
There is not much to regulate when it comes to cryptocurrencies right now. Decentralized networks are outside of the purview of any government or authority. Moreover, there is no money to be frozen along the way either. It is evident this causes a fair few problems when things go awry. Governments will continue to regulate trading platforms and other intermediary services, for the time being.
Cryptocurrency Regulation Comes to Abu Dhabi
That in itself is not a bad thing. These third parties are custodians of other people’s money. They are responsible for how money is sent and received on behalf of their users. In Abu Dhabi, it seems such trading platforms will face risk-appropriate regulatory guidelines in the near future. That is, assuming the Financial Services Regulatory Authority effectively drafts any official guidelines in the coming months. For now, they focus mainly on researching the possibilities and potential risks.
It is not the first time Abu Dhabi regulators pay attention to cryptocurrency. Last year, the FSRA issued a guidance for initial coin offerings and digital tokens. Moreover, the Financial Services and Markets Regulations were updated to encompass virtual currencies as well. It is evident proper guidelines for these industries will bring more legitimacy. At the same time, the guidelines will hopefully keep the bad acts out as well. Only time will tell if that can be the case in the future.
Virtual currencies are not legal tender in Abu Dhabi right now. However, there is a growing interest in this new form of money as we speak. There’s also an uptick in using cryptocurrencies as a medium of exchange for goods and services. Without official guidelines, things can get out of hand fairly quickly. It will be interesting to see how the regulators plan to tackle this industry. For now, everyone seems to keep an open mind, which can only be a good thing.
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